BAC - Bank of America Corporation (BAC) Morgan Stanley US Financials Payments and CRE Conference (Transcript)
2023-06-12 21:59:06 ET
Bank of America Corporation (BAC)
Morgan Stanley US Financials, Payments and CRE Conference Call
June 12, 2023 16:00 ET
Company Participants
Aron Levine - President, Preferred Banking
Holly O’Neill - President, Retail Banking
Conference Call Participants
Betsy Graseck - Morgan Stanley
Presentation
Betsy Graseck
Okay. Thanks everybody for joining us this afternoon. I do have the disclosure, then I’ll get into intros. For important disclosures, please see Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative.
Okay. With that out of the way, I am delighted to have with us this afternoon Aron Levine and Holly O’Neill, Co-Heads of the Consumer business.
Aron Levine
Good to be here. Thanks, Betsy.
Question-and-Answer Session
Q - Betsy Graseck
Yes. Thanks so much for joining us. I wanted to start off with asking a question, an overview question of the consumer strategy. And maybe just dig in a little bit to how we should differentiate between retail and preferred banking. And so maybe, Aron, we can walk through preferred banking strategy and then Holly will reflect over to you. Okay.
Aron Levine
Yes. Thanks, Betsy. Good afternoon, everybody. Let me start maybe with a real quick, just high level of consumer. So remember, we serve 66 million customers around the country. We are U.S. based only. We have about $1.67 trillion in assets, about $1 trillion in deposits, $30 billion roughly in loans and another $375 billion in investment. So that’s what makes up the consumer business. We do operate in two key segments, preferred retail, which we’ll talk about in a second. Because our model is very relationship focused, and that’s been probably the north star for us over the last 10 years, is turning the consumer business into a relationship model. We focus on having a leading digital presence, and we have one of the best digital banks in the country. But at the same time, we have about 27,000 professionals in our 3,800 financial centers around the country. That includes specialists like small business lenders, mortgage lenders and financial advisers. And so we wrap all of that with our program Preferred Rewards, which is, again, one of the strongest programs in the industry for recognizing and rewarding our clients. So the real takeaway is whether it’s retail preferred, it’s all about primary relationships growing with clients over time, and that’s how we manage it across financial centers, digital and our call center channels. So – that gives a little bit of a high level on the overall consumer. And then maybe you want to hit retail and I’ll hit preferred?
Holly O’Neill
Sure. So I’ll hit the retail space. So think of that as mass market clients generally income under $70,000. And this really is the entry point for the vast majority of our clients into the company. So about 67% of our new clients come into the retail business, and they have some pretty good statistics. So as they come in, about 53% have a deposit relationship with us, 87% primary, 84% of our households are digitally active. So as they come in, our goal is to deliver an efficient financially healthy capability to them. And then at the right point, we migrate them into the preferred business with preferred rewards and all of the benefits that come along with that relationship. So we are really the entry point. Our goal is to deliver a very efficient digital model, which I’m sure we’ll talk about. And then migrate to preferred as those relationships grow.
Aron Levine
Yes. And then preferred, which really represents about 90% of the assets, 24 million clients. And again, these are clients that have the income and in vessel assets to do really everything that we offer across our lending product spectrum and then working with us in our consumer investments business. We have 10 million actively enrolled in Preferred Rewards. So that program brings with it a 99.2% retention rate, and it’s been one of the main drivers of how we’ve been able to grow the preferred business. and we’ll talk more about. But obviously, that’s where we really work with clients to start with that primary relationships, no different than Holly and then grow through really focusing on credit card mortgage products, auto loans and then, of course, if we can also deliver their investments. It’s really critical, the preferred business is closely linked to our wealth management businesses. So if I can’t deliver through my people the right solutions, we will warm transfer and work very closely with Merrill Lynch or with the Private Bank. And there is just a huge amount of referral flow that goes on upsetting to them. And in a lot of cases, the private bank and Merrill Lynch their clients who are looking for a self-directed solution will send business back. So that’s kind of how we set these 2 businesses up.
Betsy Graseck
And the wealth management piece that you’re talking about right now, is that something that you feel is differentiated from peers?
Aron Levine
Yes, absolutely. So I’m very proud of our wealth business. So consumer investments, you know it in two ways, Merrill Edge, which is a self-directed platform, and Merrill Guided Investing, which, for lack of a better term, it’s sort of a robo-adviser model that we rolled out in 2017, although ours, really from the get-go, has always used the CIO office to drive all the portfolio management was in a sort of black box. Merrill Edge, if you go back to 2011 when it was first formed, that $50 billion of assets under management. We just set a new high watermark of $376 billion last week. So we’ve grown – so when you talk about differentiated, from $50 billion to $376 billion. We have 3.6 million accounts. And we use a very unique model of advisers that are in the financial centers full time, their base salary and bonus completely integrated in the ecosystem. So it’s really a way to work with preferred clients who are coming into Bank of America and offer them investments, which allows us to really retain those relationships longer. So we get a lot of industry awards for the self-directed platform. We don’t compete and are not trying to be for active traders. It’s really about long-term investing and being a great complement to the rest of what we offer at the bank.
Betsy Graseck
So those warm transfers are truly warm because they are working right there with you?
Aron Levine
Exactly right. Exactly.
Betsy Graseck
Maybe we could talk a little bit about the primary drivers of organic growth across the businesses from your perspective?
Holly O’Neill
Aron, do you want to start?
Aron Levine
Sure. So for us, it’s all about the core operating count. And I think what I think you’re all aware of what I think makes Bank of America’s deposit base very unique, 36 million checking accounts, $600 billion in checking deposits, that core operating count is what we drive for growth. And we start there and then through our specialists, right? So having 5,500 specialists in our financial centers, having face-to-face meetings, we have a tool called Life Plan, which allows us to work with our clients. We have over 10.5 million clients that have signed up for it. And it’s a way to set what are the clients’ goals and how to have a relationship type conversation versus a transactional one. You wrap that in with Preferred Rewards, which also has 10 million clients impact of – so we drive the revenue growth through a long-term relationship that we’ve built through really strong client care, leading digital capabilities and these two programs allow us to engage clients over time.
Holly O’Neill
Yes. And I’ll just add into that. So that long-term view on building a relationship. So, in the retail space, as Aron said driving with digital and being really efficient but complementing that with engagement through our financial centers as well, so really providing that digital and physical engagement and then in the retail space, specifically, really starting that client out with a very simplified solution set. So we call that our Essential Solutions, which is grounded in the SafeBalance product, Balance Connect and Balance Assist. And that SafeBalance product is transparent, simple, no overdraft there are ways to free if you have your relationship with us. And so that’s been incredibly successful to bring clients in, and the SafeBalance product is over half of our new account opens at this point, 54%.
Betsy Graseck
Interesting.
Holly O’Neill
And we’ve also had good success with the balance assist solution, which is low-cost, short-term borrowing option for our clients. And that really lends itself to this decade-plus long journey we’ve been on to building a core relationship strategy with our clients, some of which has come in through some of the changes that we’ve made in the NSF OD space, and that was very strategic as we move forward over the past decade and really wanted to ground ourselves in building long-term relationships with clients, and turning from a transactional business to our relationship business. And as you know, we kind of made the one of the final installments in that last year as we moved our NSF fee from 35 to 10. So that is very much behind us. And the feedback from clients has been really positive. The other benefits come through in terms of lower attrition as well as from a servicing perspective we see some benefits and efficiency as we’ve transitioned that way as well.
Aron Levine
But let me underscore one point which hopefully you’re all hearing. What’s different about us is we’re not setup as three or four separate consumer product businesses. Mortgage is one business, credit card is another, deposit is another, and investment is another. We are setup against client segments, and then we deliver all of those offerings to those client segments. But the entire model is built on the client segment first, not the product. And that’s I think what’s differentiated us over these last 10 years.
Betsy Graseck
So one thing investors look for is efficiency improvements, and maybe you could help us understand one key driver of efficiency improvement that you’re delivering in the businesses that you run?
Holly O’Neill
Yes. So I’ll give it a start. And clearly, digital capabilities self-serve is the biggest efficiency opportunity for us. We have had an experienced huge benefit there. And I would expect that we will continue to experience benefit as you simplify and improve communication with clients, as you encourage them to self-serve, but also eliminate questions upfront in the process by simplifying your product set. So it really runs the continuum. But digital, we have tremendous benefit from digital, and there is still benefit from digital to come. As you simplify the experience from the front to the back – and when I say that, I mean from sales through back office, so there is still opportunity there that we’re working on every day. And now it really comes in the flavor of really simple client experience improvements that will come primarily through the digital landscape.
Aron Levine
Yes. I mean we have a few, but the one I’ll highlight is, obviously, our financial center channel. I mean, if you go back all the way in 2010, we had 6,100 centers and about $440 billion in deposits. As we sit here today, we have 3,800 financial centers and a $1 trillion in deposits. And even if you just looked at the pandemic, we went into the pandemic with about 4,300 centers. We now have 3,800. So we have been really worked hard. And looking at as transactions have come down, we’ve obviously been converting to a relationship model. So the traffic coming into our centers more and more, sitting down with our specialists as opposed to waiting line as we try to move all that transaction work into the ATMs, into the phones. And so we’re able to continue to grow, and we still add centers every year.
But on a net basis, that’s a pretty material reduction that we’ve had over either a 3-year period or a 10-year period, and there’s still opportunity there. Both the physical center itself as well as just within the whole network, being more streamlined with a number of people in the centers, the staffing to reflect, again, lower transactions and more kind of relationship model. So that’s been a huge area of success for us in terms of really finding some efficiencies in the whole financial center channel.
Betsy Graseck
Efficiencies are equal to multiples, so...
Aron Levine
Yes, there you go.
Betsy Graseck
I wanted to pivot to the health of the consumer. You have a really unique vantage point with the breadth of folks that you engage with every day. So could you give us a sense as to where you see their financial health today? Maybe you could sprinkle your answers with some comments around their deposits and leverage and how you see the trend likely to go from here.
Aron Levine
I’ll hit the pause so we can hit credit side, so we divide and conquer. So – look, obviously, through the pandemic and all the statins, our clients still, as we sit today, just generally across the board, have about 30% more in their checking accounts than they did pre-pandemic. It’s come down little bit, the high watermark was about $15,500 on average and that we hit that about a year ago. It’s running around about $14,000 now, but it’s still 30% higher than it was and across every cohort. So if you look at below $50,000, $50,000 to $100,000, and $100,000 plus clients, in each of those, it’s roughly the same, the lowest cohort, it’s up about 34%. I think it’s about 30% and 29% in the other. So that means you haven’t – our client base is healthy, that they have more money that they’re – and while it’s starting to come down, still very elevated from where it was before. So that’s one big sign and obviously, how I can talk about on the credit side. But you’re seeing spending is again slowed, but it’s still up. It’s up 2%, 3% year-over-year. So the consumers are spending and they still have money in their accounts. They’re paying debt down a little bit more. So it’s all very healthy behaviors that we’re seeing across the client base.
Holly O’Neill
Yes. And from a credit perspective, I would just add that the consumer continues to borrow it’s about 1% down from pre-pandemic if you look at the card borrowing rates. So they still have some room to borrow. They’re not fully up to where they were pre-pandemic. We’re seeing their payment behavior, still very strong. So the rate at which they’re paying their card down still well over where it was pre-pandemic, which I think is a very strong sign to the fact that they still have cushion and they still have some room there. And then from our own vantage point, certainly, credit statistics still look really strong. And we are always comparing to 2019 which was a historic low and a historic year of really strong performance. So we really haven’t seen any material movement there. So from a credit perspective, we still look at the consumer as being very healthy, still having borrowing capacity and still demonstrating good behavior as it relates to their card patterns.
Betsy Graseck
And any changes in underwriting as a result of that, it sounds like probably not?
Holly O’Neill
No. I mean we, obviously, over a decade ago, adopted responsible growth, right? And – so the whole theory behind that was adopt the strategies, stick with it through cycles through the long-term, and that’s really what we’re seeing here. We obviously watch it very closely. And I would say we nip and tuck at the edges, but there have been no real big movements. And that was one of the drivers behind the responsible growth strategy and we really wanted to stick with our clients through the cycle.
Aron Levine
Yes. And if you – during the pandemic, we tightened up a bit. And so that’s been – we’ve kind of – as we came out of ‘22, ‘23, we got back to sort of that pre-pandemic model. And obviously, we’ve seen really good growth getting back. But from an overall credit standpoint, as Holly said, we’re still running less than 2019, and 2019 was probably the best credit year than 15, 20 years before. So there’s a lot of room on the credit side. But we’re going to still stick to our guns and maintain a pretty conservative posture.
Betsy Graseck
And how do you think about the student loan moratorium that’s going to be going away soon, where folks will have to – that have this debt, probably have to start repaying maybe $250 a month or so plus/minus?
Holly O’Neill
Right. So we do have clients in the portfolio. We know what the behavior looks like if they have a deposit relationship with us. Some of those clients have continued to pay their student debt through the moratorium, and others have not. So those that have not obviously tend to be in those lower FICO scores. And as you know, our portfolio as compared to our competitors, we have the lowest percentage of clients in those lower FICO scores under 660. So the vast majority of our portfolio is over 680. So we’ll continue to watch that. I would expect that as the moratorium ends, we’ll watch those lower FICO scores, but our portfolio is very small there.
Betsy Graseck
Okay. I wanted to shift to deposits. We’ve obviously had a pretty exciting environment here with deposits. And I think as of March, tell me if I’m wrong, but I think BofA’s consumer deposits were down around 3% year-on-year, but loans were up 7%. So I just wondered, does that matter to you? Or is that just something that a bank analyst does for fun?
Aron Levine
Do you want to take it or – so – it always matters, right? We had a pretty substantial run, as you know, for – I think we were up about $370 billion in deposits over the course of the last 3 years, so not surprising given all the actions, that some of that would start coming down. But we’re going to retain probably 90% of that growth that we had over those years. And you have to keep in mind one thing Bank of America has about $1.9 trillion in deposits and about $1 trillion in loans. So – we obviously are not in a position where some other players may be that says we need deposits to fund our loan book. So the question for us that is, what’s the right way thinking about retaining clients, being competitive in the marketplace but not necessarily chasing the highest rates that might be available. So we are very conscious of when we make decisions on providing rates. CDs only represent $34 billion out of the $1 trillion in deposits. And obviously, that’s usually where you see the biggest rate play. And so we can do some things. We certainly have competitive rates in that space. But this whole idea of 36 million checking accounts and the fact that it’s very transactional and those accounts have been elevated. And even if they come down a little bit, that’s – no one’s looking for rate in their checking account, right? Those checking accounts are used to pay bills, buy groceries, go to the movies. So for us, we have this very powerful engine that is transactional checking accounts that are core, and that’s not something that we have to concern about rates. So that’s a very stable model. And we just keep adding more checking accounts every quarter and keep growing it.
Betsy Graseck
So deposit pricing strategy is steady as she goes? Is that fair?
Aron Levine
Yes. I think it’s targeted. I think, again, some – what – we’ve seen ourselves raise rates on the CD side. Again, it’s a small part of our portfolio, and we probably play it not at the top of the market, but a little bit below it. But otherwise, I think for us, that there’s not a lot of change in our overall strategy.
Betsy Graseck
And just from the perspective of deposit betas, give us a sense as to where you think that’s going for yourself? And do CDs become more meaningful over time or not really? Not?
Holly O’Neill
Yes. I think from a CD perspective, as Aron said, we have a wide range of offerings, right? And our whole goal is to have that option for clients who are seeking rate. But also, as Aron said, such a large percentage of our deposit base are checking, our core checking clients, right, where they’re using that money for day-to-day operations. So that’s what creates the stickiness. And then we do have that CD portfolio for clients who do want rate. But that – I mean, it’s been pretty controlled when you think of that portfolio in the context of the whole deposit base. So we want to use that to make sure we maintain internally but it has not, certainly, for our clients, been a run to get CD rate or additional rate because I believe that the consumer client think about how you use your checking and savings balances is for day-to-day operations, right? And that’s how the consumer client really thinks about it. And then as far as deposit betas, I would expect they’ll stay kind of in the range where they are today, but we’ll continue to watch it. And make sure we maintain and retain those clients as core relationship line.
Aron Levine
Yes. And you can’t underestimate the value of this Preferred Rewards program when you’re talking about the 10.5 million of our larger clients with larger balances that are now – because of the deposits and investments they hold with us, they get bigger benefits on their credit card, benefits on auto loans. So there’s this real stickiness about, well, that – those deposits, the rate is one thing, but I know I’m getting a big substantial reward on my credit card. So that’s why Preferred Rewards for years now has had like 99% plus retention and that is a substantial amount of our overall deposit base. So like that’s a powerful way in which you retain clients that takes it out of the normal realm of simply what the pricing is on our deposits.
Betsy Graseck
Okay. Got it. Just wanted to lean in a little bit on the wealth topic that you raised earlier because it’s a great business, it’s high growth, it’s lower risk. Competitors are noticing, right? You’re seeing folks leaning in. Could you give us a sense as to anything you are doing differently in the face of that?
Aron Levine
Yes. So remember, our wealth business at Bank of America is – there is a continuum. And so you obviously have Merrill Lynch Wealth Management that everyone is aware, which is a whole service, a financial advisor model and the thundering herd, and led by now Eric and Lindsay. And then you have a private bank with Katy Knox. Consumer investments is very unique, in that we have for, I think still maybe the only with a base salary and bonus, but fully licensed financial advisor that sits within a financial center and really gives access to clients that have generally less than $250,000 to invest, but never had the opportunity to have someone that they can talk to. And we couple that with a highly digital platform. So, Merrill is self-directed, which again has grown substantially over the last 10 years, we are growing about 9% per year clients, 9% to 10% growth, up to about 3.62 million clients now. So, that’s a very unique model. Then Merrill Guided Investing, which allows clients to put into portfolios, something like a betterment of wealth front, our version of it. And we have had substantial success there. So, what’s different is the model in terms of how much it’s integrated into the preferred business, the ecosystem of the financial centers the advisors themselves, base salary plus bonus. They leave the company. There is no connection to their client. It’s a corporate client. This platform that gets highly rated across the industry, that does both self-directed and kind of guided. And so it’s just a very unique model that again has grown substantially. I mean the last four quarters alone, we have $37 billion of organic growth, which was our best four quarters ever. We have set kind of high watermarks in the fourth quarter last year of at $15 billion, there has been $11 billion in the first quarter. So, we are just seeing it – the momentum pick up. And like I said, we just crossed $375 billion in total AUM, which I think puts us at like the fourth or fifth, and we started with effectively nothing 10 years ago. It’s a pretty unique model.
Betsy Graseck
No, it’s excellent. Maybe we could flip to digging in a little bit more on the efficiency and technology to get at some of the themes that you have been raising here. First on the good old-fashioned branch count optimization, every time I feel like you are done, you keep on doing a little bit more. So, maybe you could help us understand where you are on that journey?
Aron Levine
Yes. So, we are in 83 of the top 100 markets. And over the next few years, we actually are going to expand into seven more. So, we will be in 90 of the top 100 markets by the end of 2025, markets like Milwaukee, New Orleans, Birmingham, Madison, Wisconsin, Boise, so these seven markets that we hadn’t gotten to. Remember, we have opened in 15 markets since 2015, Denver, and Minnesota, Pittsburgh, Salt Lake City, Indianapolis. So, that’s one part of our strategy, which is growing the expansion markets, and we do it very efficiently. So, really good success of how fast we can grow with a small number of centers. In our existing markets, right, where again, we are number one in 16 out of the 30 top markets, we are number one, two or three in 25 of the top 30 markets. There are certainly plenty of places where we can identify a location where there is two centers that are existing, and we could put a new center in the middle somewhere. And we believe we can pull all that traffic and then close the other two. So, we have a strategy of identifying areas where we can close two, open one. So, that on a net basis, we are kind of coming down. We took a big chunk out during the pandemic. We closed 525 centers in ‘21 and ‘22, which is a pretty substantial number in a 2-year period. But again, we had been paying attention to traffic reduction, changing demographics, all the things – all these data points that we look at and said, because those centers were temporarily closed, we can go ahead and permanently – we won’t reopen them after the pandemic. So, what you will see from us is each year, we continue to add centers across the country. But on a net basis, we reduce as we identify those places where there is a couple of older centers that could go and we replace it with a brand-new center. By the end of this year, we will have the entire 3,800 having been renovated. We have been on an aggressive renovation program over the last 5 years. And – that’s been an important capital investment, so that every center looks like it should, a modern center. And so that will slow a little bit, the money we will spend for that as we go forward. But – so yes, I think you will see a net reduction, but it’s more gradual than it has been. And I think it’s very much in equilibrium with traffic for transactions that has gone down substantially, but we have specialists so that the number of appointments that we have keeps going up, and that’s what we are sort of looking for. Transactions to go down, you can close those centers. People will drive a little longer. They will make more appointments to go talk to someone about their financial life about a mortgage, about a small business. And so you can change the sort of the nature of why a financial center exists. It’s gone from transactional to relationship to a broader, more sophisticated set of conversations.
Betsy Graseck
And digital is part of that, right?
Holly O’Neill
Yes. I mean digital is really integrated with everything that is done in the financial centers, right. So, that really is the key for us is that integrated experience for clients, whether they are walking into a financial center or they are engaging in the mobile app or online banking. But as I have said earlier, digital still has significant opportunity for us to streamline the experience. Zelle is just one of many examples of last year’s all surpassed paper checks. So, people sent more though payments than they wrote paper checks. I think we have seen the end of that. So, that will continue to get – that gap will get wider. And that has tremendous benefit and efficiency for us all along the food chain, right. Client experience, much easier and better. And then in the back office, without paper check, Zelle is much more efficient for us as well. So – that’s just one example. And Zelle will continue to have enhanced capabilities, recurring payments, and we take client feedback in a whole variety of ways to make sure we are getting at that digital experience in a way that makes it easier for clients to self-serve, right. And then that leaves the capacity in the financial centers to engage in clients on more of an advice-based model. So, it all goes hand-in-hand together. And Aron team uses digital assisted shopping so that creates another intersection point between digital and our financial centers. So, if they start a conversation and a client is not yet ready to close an account or open the account. They can engage the mobile technology, put it in their shopping cart and the client can pick it up. So, there are all sorts of ways. Those are just a couple of examples of the way our digital and our physical properties are in there.
Aron Levine
The digital-assisted shopping, I won’t underestimate the amount of sales that now occurs. So, you think about that, you are in the center, someone is busy, but we start a conversation. Historically, that’s where it would end, and you have to hope they come back. Now, just like Amazon, we say, no, let’s put it into your shopping cart. And when they get home, or they – with their spouse or partner, they now look at it, and they can fulfill right online. So, they don’t have to come back in. So, the level of efficiency of that sale is doubled. You have double the time to sort of do it. So, that’s been a huge and we have just seen a really exponential growth and that being the way in which we fulfill sales. So, it starts with the center, but it ends in somebody’s house at home. And then, of course, now they are digitally engaged. So, they are likely to now use digital for lots of other things, not just that first opening.
Betsy Graseck
It makes a lot of sense.
Aron Levine
Yes, it’s pretty cool.
Betsy Graseck
What about AI? Is there anything that you guys are interested in leveraging AI for?
Holly O’Neill
Yes, a lot. I mean think about how we use Erica, right. So, Erica is one flavor of AI in terms of engaging with our clients. So, Erica sits right on the mobile app and you can ask Erica any question that you want. Erica answers it, a large percentage of the time. And if Erica cannot answer it, and I think this is a really key differentiator for us. If Erica cannot answer the question, we actually connect Erica right into one of our specialists, whether it’s through chat or it’s through the phone. And that’s been very deliberate strategically for us to drive the confidence in that capability and continue to deliver a great client experience. So, that’s one example. There are also applications internally, how to use AI to make our teams better and more efficient team and giving them just the right level of information they need to assist a client. So, they are both client-facing and internal opportunities for AI to drive more efficiency and to get clients a better experience.
Betsy Graseck
So, just before we wrap up, bringing it back to present day and the quarter, I just wanted to understand if there is anything in the environment so far this quarter, that you would want to highlight or anything that’s impacted results or updates on expected performance? I think our performance for the quarter is, as you would expect, very consistent with what you have seen in the first quarter, so…
Aron Levine
Well – one thing I hit was, again, I talked about the importance of our checking growth. I mean we are going to, I think put up another very strong, we use net checking. That’s been something we have looked at. We have had 17 straight quarters up until now of net checking growth, which is important, again all-time low client attrition, strong client acquisition. So, I think for us that’s something that we start to stop looking at all the time in the quarter, and we feel like this quarter should be no different. So, that’s an important point.
Unidentified Analyst
[Question Inaudible]
Aron Levine
Yes. Thanks Lee [ph]. So, real quickly one. So, we talked about the partnership that we have with wealth management. But on a similar front, we have built a program called employee banking and investing. We now have over 300 either large corporate or commercial clients of the bank that have signed up to have received benefits for their employees across all the banking products. So, we work with the company, and we will go to on-site and do seminars and sort of bring Bank of America’s consumer business to them. We have over 3.1 million U.S. based employees of those companies now in the program. And what we see over time is generally with every company, we start with about 20% of their employees having a Bank of America relationship. And over the time, especially the ones we have been tracking for 5 years, 6 years, 7 years, we see anywhere from 400 basis points, 500 basis points of growth, 800 basis points of penetration. So and we measure that sort of assuming some natural growth, so what’s incremental. So, it’s a great program, because one, our commercial bankers are building a relationship and our corporate bankers with their clients and getting – really adding value that costs the company nothing. Great for us because it gives us another channel to go out proactively and find consumer clients.
Betsy Graseck
And that’s been for how many years you said?
Aron Levine
Boy, I think we launched that about 5 years ago. And so we are already getting up to 300 – over 300 clients and 3 million. That’s been pretty effective tool for us.
Betsy Graseck
I would think there would be some nice synergies there within the BofA organization.
Aron Levine
Yes. It’s awesome. Yes, people love it.
Betsy Graseck
Okay. Great. Well, thank you very much for joining us today. Aron and Holly, I appreciate your time. Thanks.
Aron Levine
Thanks everybody.
For further details see:
Bank of America Corporation (BAC) Morgan Stanley US Financials, Payments and CRE Conference (Transcript)